18 March 2004

S2M-1050 Council Tax

Scottish Parliament
Thursday 18 March 2004
[THE DEPUTY PRESIDING OFFICER opened the meeting at 09:31]
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Council Tax
The Deputy Presiding Officer (Trish Godman): The next item of business is a debate on motion S2M-1050, in the name of Fergus Ewing, on the abolition of the council tax, and three amendments to the motion.
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Stewart Stevenson (Banff and Buchan) (SNP): This has been an interesting debate, with more heat than light. Tavish Scott made an interesting point about the way in which council tax benefit works in relation to the current system. However, one of the key issues to bear in mind is the under-claiming of council tax benefits to which people are entitled compared with the claiming of benefits that are provided by the income tax system, which ensures that everyone can get what they are entitled to. The claim that the council tax system works fairly and properly because people may claim benefit is therefore not an adequate argument in favour of it.
Tavish Scott: I take Mr Stevenson's point, but that is exactly why we support so strongly the work of the department in London—the one whose name I could not pronounce earlier—that is specifically taking forward the take-up campaign in relation to council tax benefit.
Stewart Stevenson: I support any campaign that will ensure that we increase the level of take-up of benefits of all kinds. The difficulty is that the Government will not achieve the take-up that would be achieved via an income tax system, no matter how hard it tries. That is the fundamental problem.
The minister is not alone in being confused. Brian Monteith showed that he moves in rather different circles from those in which I move when he suggested that the self-employed are on a 40 per cent marginal rate of income tax. I invite him to visit my constituency, where there are many very poor self-employed people, some of whom pay no tax at all and of whom only a small minority pay 40 per cent. The whole point of an income tax system is that what someone pays is based on what they can afford.
Mr Monteith: Will Stewart Stevenson take an intervention?
Stewart Stevenson: Look at the clock—I do not have time. I am sorry.
Mark Ballard promotes the land value tax—as usual and as is proper, given his party's commitment to it—but fails to explain how one may trade a capital asset into a revenue stream to pay tax. It is the same problem whether people have locked-in value in a capital asset in land or in houses: they simply cannot use it in that way.
Iain Smith suggests that it is unfair that people pay different levels of tax depending on where they live in a council area. That is the present position under council tax. That was a valuable contribution for Iain Smith to make to the debate, as it highlights the fact that local decision making—
Mr Monteith: Will the member give way?
Stewart Stevenson: I am in my last minute and am running out of time.
Des McNulty suggested, with a cavalier disregard for the interests of the people of Scotland, that we could hardly expect London to change the rules because we want to change the way in which our local councils gather income. Is not that precisely why the Scottish Parliament needs the full powers of a normal Parliament? That was an aberration on his part. He also said that low-income pensioners would start to pay tax, which shows a basic misunderstanding of the income tax system. Was that an aberration on his part, or an adumbration that we will shortly see a change in that regard?
I have had only a limited amount of time to speak, but that is as nothing to the limited time that the Government will have if it fails to respond to this problem. The minister must listen up or lose out.

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